“Phoenix Mutual Aid” to protect daily living and the region from natural disasters
Northern Kyushu flood disaster in 2017 caused by record torrential rain destroyed more than 1,300 houses totally or partially. According to RCP scenarios, the number of occurrences of torrential rain (an hourly rainfall of more than 50 ㎜) is expected to increase in the future. If greenhouse gases continue to be emitted, the number as a national average is predicted to more than double at the end of the 21st century.
Hyogo Prefecture set up its original program “Phoenix Mutual Aid” in September 2005 to help disaster victims rebuild their houses. We interviewed Ryutaro Yamamoto at the Disaster Preparedness Planning Bureau, Hiroshi Ando and Toshihiro Fukunaga at the Housing Reconstruction Mutual Aid Foundation running the Phoenix Mutual Aid about the prefecture’s enthusiasm for housing reconstruction and the mechanism of “mutual help.”
Prefecture’s original system of “mutual help” coming out of the lessons learned from the Great Hanshin Earthquake
As preparations to protect houses and properties from natural disasters, earthquake insurances and the mutual insurance of Zenkyoren are available. What is the difference between the Phoenix Mutual Aid and other insurances?
Ando: Earthquake insurances, Zenkyoren’s mutual insurance and other fraternal insurances cover you against damage of a house. The insurance money is paid according to the extent of the actual damage. Our program pays money for rebuilding, purchase or repair of a house. That is the biggest difference. The policy holders are to pay a contribution in the form of mutual help among “self-help,” “mutual help” and “public help”* and the contributions are saved to build up funds. The program is totally different from insurance plans for individuals, which are based on “self-help.”
* “Self-help” is to protect yourself by your own efforts in case of a disaster. “Mutual help” is to help each other in the community or by volunteers. “Public help” is support by governments and other public agencies.
Yamamoto: The Phoenix Mutual Aid is a mutual help program between prefectural citizens run by the prefecture according to an ordinance. Anyone who owns a house in the prefecture can take out the insurance. With an annual contribution of 5,000 yen, a maximum of 6 million yen is paid for rebuilding a house at least half destroyed regardless of the age or size of the house (Figure 1). It’s true that 6 million yen is not enough to build a new house from scratch. If, however, combined with “public help” and “self-help,” the program will help take a big step toward housing reconstruction.
Figure 1: Source: “Phoenix Mutual Aid” leaflet of Hyogo Prefecture
Fire and earthquake insurances set restrictions on the purchase and payment. You mean, therefore, the Phoenix Mutual Aid will be made the most of particularly if combined with other insurances?
Yamamoto: That is right. You can take out the Phoenix Mutual Aid and claim benefit even if you are a policy holder of an earthquake insurance or any other insurance. The amounts of money shown in Figure 2 are only an example but the amounts of money of “public help (benefit from the national government)” and “mutual help (Phoenix Mutual Aid)” are as shown in the diagram. It will be possible to rebuild a house without extra payment by increasing the amount of “self-help,” i.e., an earthquake insurance or any other mutual aid.
It is characteristic that the contribution is a fixed sum.
Ando: As this is a program of mutual help between house owners, we believe the contribution should be one flat sum across the board.
Each prefecture offers its original program for disaster victim support. What has triggered Hyogo Prefecture to develop the mutual aid program ahead of other prefectures?
Yamamoto: What underlies is the Great Hanshin Earthquake. Those days, the elderly and many others had to give up rebuilding their houses. Those people took refuge in other areas of the prefecture or other prefectures and sometimes never returned. They were away from their communities and the bond was broken. Some people died alone in a strange land. Once you lost your house, the basis of life would be threatened. The prefectural government strongly felt that they must help disaster victims rebuild their houses on their own in their homeland.
Ando: A standstill in housing reconstruction resulted in a delay in the regional reconstruction. In the aftermath of the earthquake, Hyogo Prefecture began to call for nationwide support programs by the national government, for instance, proposing “earthquake hazard mutual-aid house insurance program.” Unfortunately, a national mutual aid program was not established. However, the “Act Concerning Support for Reconstructing Livelihoods of Disaster Victims” was enacted in 1998. After revised twice, the amount of the benefit from public funds was increased up to 3 million yen. But, it was not enough to build a house. Besides that, the use of the benefit was limited to furniture and household goods and it could not be used for new construction or repair of a house till 2004. Under the circumstances, the prefectural government decided to take the initiative and established its original system of “mutual help” between house owners to cover the construction of a house.
Figure 2: Source: “Phoenix Mutual Aid” leaflet of the Hyogo Prefecture Housing Reconstruction Mutual Aid Foundation
Improving to meet changing needs but struggling to increase the purchase
How much have you paid insurance benefit so far?
Fukunaga: By the end of August 2017, we paid 605.3 million yen for 20 natural disaster cases. The largest sum we paid was 446.8 million yen for a flood disaster in Sayo-cho due to Typhoon Etau. Most damage was caused to household goods. In those days, there was no program for household goods. In the next year, we set up a household goods reconstruction program. The second largest sum was 68.6 million yen paid for damage by an earthquake with the epicenter on Awaji Island in 2013. Partial destruction smaller than half destruction accounted for the most part of the damage. It was also not covered by the program. The next year, we added a special contract for partial destruction.
That was a prompt response, probably thanks to your experience of a great disaster. I think the Phoenix Mutual Aid is a welcome program for people without sufficient funds on hand. I guess many citizens have joined the program.
Fukunaga: Unfortunately, only 9.5% of the households have joined and we haven’t been able to attain the goal of 15% we had set at the start of the program. As of the end of August 2017, the total number of policy holders was 167,311. We need about 100,000 households more to join in order to achieve the goal.
As Hyogo Prefecture was struck by natural disasters of some kind every year from 2009 (Figure 3), I thought the citizens would have high risk awareness.
Fukunaga: It’s true that residents of disaster-stricken areas are highly aware of hazards. In Sayo-cho, more than 30% of the households have joined the program. The percentage is the highest of all the cities and towns in the prefecture. The Awaji area is also prepared for Nankai megathrust earthquakes and the percentage is also high. In urban areas, many residents live in condominiums, the percentage is low. People tend to think condominiums are robust. In addition, the housing reconstruction program is intended for house owners and tenants cannot join the program.
Ando: Because the earthquake was extremely big and damage was massive, we expected to attract more people at first. However, it took as long as ten years to finally establish the current program after seeking the establishment of a national program for housing reconstruction mutual aid in the immediate aftermath of the earthquake. I personally feel that the citizens awareness of hazards gradually faded during those 10 years.
Disasters covered by the program
(As of May 31, 2017)
Figure 3: Source: Pamphlet of Hyogo Prefecture Housing Reconstruction Mutual Aid Foundation
Enhancing the region’s disaster preparedness joining hands with insurance companies
Why do you think not many people are joining the program?
Ando: Our foundation conducted a survey on the Internet two years ago. We received response from about 1,000 people. Only 22.2% of the respondents answered “I have joined the program” or “I know about the program.” The majority of the respondents did not know the program. As we were conducting PR campaigns, we were shocked at the result. We decided that we had to do something. Since 2016, we have set September as a month to focus on the PR and we have been staging events and street campaigns intensively.
In addition, we are making efforts to let the citizens of the prefecture know about the program, giving out round fans for advertisement and asking communities to hand out leaflets to all the households. Last year, we asked four cities and towns to post a leaflet in mailboxes and 140,000 copies were posted all together. This year, we are going to ask 23 cities and towns to post more copies. We post a small article about the program in the local paper of some cities and towns. We have increased the number of the cities and towns from 12 last year to 20 this year.
Events and campaigns are good opportunities to directly communicate with citizens. What are their reactions?
Ando: When I am working for a campaign, people often tell me “It’s the prefectural mutual aid, isn’t it? I am a member.” There are so many mutual aids and insurances. It’s very difficult how we should differentiate our program from others. As to the combinations of “public help,” “mutual help” and “self-help,” we have been working on a new challenge with several non-life insurance companies since last fiscal year, in addition to other mutual aids, to encourage our clients to take out an earthquake insurance and their clients to join the “Phoenix Mutual Aid.”
Yamamoto: We concluded a mutual cooperation agreement with Mitsui Sumitomo Insurance Company, Ltd., and Sompo Japan Insurance Inc. in July 2016. We are cooperating to enhance the disaster preparedness of the region. For example, the insurance agents for their earthquake insurances promote the Phoenix Mutual Aid.
Experts expect that we will have larger typhoons and more frequent local heavy rain due to climate change in the future. The probability of Nankai megathrust earthquakes you have mentioned is increasing. There may be possibility that payment will exceed the accumulated fund.
Yamamoto: The amounts of the insurance benefit are determined by simulating the damage in the past 100 years. Actual damage has not exceeded the assumed damage so far. The fund is more than 7 billion yen. We consider the fund will be enough for some time. The fund might become tight if a Nankai megathrust earthquake occurs and causes massive damage. If a shortage of the fund is temporary, the foundation will borrow funds from a bank. However, we believe we will be able to strengthen the mutual help between house owners by attracting more clients. Considering that aspect as well, the prefectural government will continue to call for the development of a national program.
(Posted on February 22, 2018)
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